October 29, 2011
Will California Law Help Eradicate Human Trafficking?
by Robert Kropp

A white paper from Verite argues that companies need to go beyond compliance with the law to
effectively address forced labor and human trafficking throughout their supply chains.

The California Transparency in Supply Chains Act, signed into law in 2010, becomes effective on
January 1. On that date, retailers and manufacturers with more than $100 million in global revenues
will be required to publish on their websites their policies addressing slavery and human
trafficking in their supply chains. The law will affect any company of that size doing business in
California; the number of companies to be impacted is estimated at 3,000.

With
justification, the law has been hailed as a major victory by advocates for corporate transparency
on human trafficking in supply chains. When Governor Arnold Schwarzenegger signed the bill into
law, Christian Brothers Investment Services
(CBIS) stated, "We welcome the opportunity to engage with companies in developing good
practices that comply with this new law."

In August of this year, New York Congresswoman
Carolyn Maloney introduced the Business Transparency on Trafficking & Slavery Act, which would
require disclosures similar to those in California on a federal level.

Will the California
law itself help contribute to the eradication of human trafficking, which according to estimates
affects more than 2.4 million victims worldwide? In a recently published white
paper, the nongovernmental organization Verite argues that compliance alone will not be enough.

"Companies should instead commit to finding trafficking and forced labor where they exist in
the supply chain, and resolving these abuses where they are found," Verite states.

Acknowledging that corporate efforts to eradicate forced labor and trafficking throughout
supply chains present "substantial challenges," Verite's white paper outlines the steps companies
should take to do so. For example, audits of supply chain compliance provide meaningful information
only when workers are interviewed off-site under conditions of confidentiality.

Also, the
paper continues, companies cannot turn a blind eye to violations occurring among subcontractors to
their direct suppliers. "The most egregious violations are often found in second and lower tiers of
the supply chain, including at the commodities and raw-materials levels," the white paper states,
as an earlier Verite report on the role of
brokers revealed. In fact, the white paper continues, forced labor "is most common at the base
of the supply chain."

"Broadly credible assessments must be integrated into companies'
entire legal compliance and corporate social responsibility programs and cover the entirety of the
supply chain," the white paper advises, including the farm and factory level, where properly
trained personnel "can play a critical role in rooting out abusive conditions on the front lines."